According to Elson (Governing Global Finance, 2011), an international economist and consultant who’s worked with the International Monetary Fund and the World Bank, there’s been a “big reversal” in the fortunes of East Asia and Latin America. Since the mid-1970s, nations such as Japan, China and Singapore have benefited from globalization, experiencing sustained, rapid economic growth. However, Latin America, which was once the most important region in the developing world, has relatively stagnated. Elson presents a far-ranging analysis of why East Asia prospered while Latin America did not. He focuses on so-called “deep determinants” of economic growth: initial conditions rooted in history and culture, policy choices, the role of institutions and political economy. He contends that East Asia was aided by its Confucian tradition, its effective bureaucracies, and policies that promoted stability and investment. In East Asia, he says, government tended to view economic development as a long-term goal. By contrast, he says, Latin America was burdened by Spanish-Portuguese colonialism, rampant inequality and weak government administration pressured by outside interests. In this lucid, timely and meticulously researched work, Elson bolsters his thesis by comparing the evolutions of six nations: Jamaica versus Singapore, Chile versus Malaysia, and Indonesia versus Venezuela. The starkly different outcomes offer policymakers broad lessons, which the author deftly outlines in 10 “propositions” about the nature of successful economic development. Any economics text requires some intellectual stamina, but Elson does an admirable job of untangling the complex forces at work and presenting them in ways that laymen can understand. (The lack of executive summaries of each chapter is an unfortunate oversight, however, as it would have made the book even more reader-friendly.) Overall, the implications of Elson’s work are profound. Many believe that global growth in the 21st century hinges on emerging nations, and the author’s findings present a startling diagnosis of why some countries climb the economic ladder while others struggle to hold on.
Anyone with a political or financial stake in the developing world should study this compelling, scholarly work.